Amherst, Front Yard Residential to Merge in $2.3B Deal
Amherst will acquire Front Yard in a transaction that is expected to close in the second quarter of 2020.
Amherst Residential, a subsidiary of Amherst Holdings and single-family home rental operator, has entered in a merger agreement to acquire Front Yard Residential in a deal valued at $2.3 billion. The deal will include debt to be assumed or refinanced.
Once the deal closes, affiliates and subsidiaries of Amherst Residential will acquire Front Yard’s operating platform and assets, including a portfolio of 15,000 single-family home rentals that are currently managed by HavenBrook Homes, Front Yard’s operator. The merger will expand Amherst’s nationwide portfolio of single-family home rentals to more than 36,000 homes.
The deal comes at a time when the single-family home rental market, which counts more than 15 million renters, is generating increased interest from investors. In December, Global City Development partnered with alternative investment firm Leste on a $2.5 billion housing platform aimed at delivering 10,000 single-family home rental across the U.S. The deal came a month after private equity giant Blackstone exited the single-family market, selling its stake in Invitation Homes Inc. for about $1.7 billion.
Amherst Residential President Drew Flahive said in prepared remarks that the acquisition of Front Yard will further grow the firm’s single-family real estate portfolio across the U.S. The company, which has offices in Austin, Texas and New York, N.Y., has raised more than $5.5 billion of debt and equity capital for its single-family rental portfolio since its launch.
Founded in 2012 and based in the U.S. Virgin Islands, Front Yard Residential’s portfolio of single-family rental homes is spread across more than 20 states and a dozen major markets in the U.S. The company’s CEO, George Ellison, said in a statement that the firm and its residents will benefit from being part of a larger, vertically-integrated organization.